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Feb. 2, 2022, 8:40 a.m. EST

Electronic Arts stock falls as forecast comes in short of expectations

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By Wallace Witkowski

Electronic Arts Inc. stock dropped 3% in after-hours trading Tuesday after the videogame publisher suggested it will start off 2022 at a slower-than-expected pace.

EA /zigman2/quotes/206954087/composite EA +2.50% — known for sports games such as “FIFA 21” and “Madden NFL 21,” as well as action titles like “Apex Legends” and “Battlefield 2042” — reported fiscal third-quarter net income of $66 million, or 23 cents a share, compared with $211 million, or 72 cents a share, in the year-ago period.

Revenue rose to $1.79 billion from $1.67 billion in the year-ago quarter. Bookings, which account for deferred revenue, reached $7.25 billion over the trailing past 12 months, the company said. Net bookings for the quarter were $2.58 billion, compared with $2.4 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of 5 cents a share on revenue of $1.78 billion and net bookings of $2.66 billion. Last quarter, EA forecast earnings of about 2 cents a share, revenue of about $1.75 billion and bookings of $2.63 billion.

For the fiscal fourth quarter, EA executives forecast earnings of 46 cents a share on sales of $1.76 billion, with net bookings also hitting $1.76 billion. Analysts on average had been expecting fourth-quarter earnings of 62 cents a share on sales of $1.77 billion and net bookings of $1.81 billion.

Read: The pandemic boom in videogames is expected to disappear in 2022

Shares fell more than 5% in after-hours trading immediately following the release of the report, after declining 2.1% to in the regular session to close at $129.94.

EA is one of the few big names in videogames yet to get swept up in M&A fever this year . In January, Sony Corp. /zigman2/quotes/208567357/composite SONY +1.02% /zigman2/quotes/201361720/delayed JP:6758 +0.84% said it would buy videogame publisher Bungie for $3.6 billion , Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +6.16% announced plans to buy  Activision Blizzard Inc. for $69 billion; and Take-Two Interactive Inc.  /zigman2/quotes/204008930/composite TTWO +4.28% announced it  would acquire Zynga Inc.   for $12.7 billion.

Activision Blizzard is scheduled to report earnings on Thursday, and Take-Two is scheduled to report on Monday, Feb. 7.

/zigman2/quotes/206954087/composite
US : U.S.: Nasdaq
$ 130.78
+3.19 +2.50%
Volume: 2.81M
Nov. 30, 2022 4:00p
P/E Ratio
40.83
Dividend Yield
0.58%
Market Cap
$35.23 billion
Rev. per Employee
$561,473
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/zigman2/quotes/208567357/composite
US : U.S.: NYSE
$ 83.07
+0.84 +1.02%
Volume: 937,804
Nov. 30, 2022 4:00p
P/E Ratio
13.66
Dividend Yield
0.47%
Market Cap
$101.95 billion
Rev. per Employee
$769,661
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/zigman2/quotes/201361720/delayed
JP : Japan: Tokyo
¥ 11,350.00
+95.00 +0.84%
Volume: 2.22M
Dec. 1, 2022 1:25p
P/E Ratio
15.07
Dividend Yield
0.62%
Market Cap
¥14102.06 billion
Rev. per Employee
¥95.12M
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/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 255.14
+14.81 +6.16%
Volume: 47.59M
Nov. 30, 2022 4:00p
P/E Ratio
27.49
Dividend Yield
1.07%
Market Cap
$1791.53 billion
Rev. per Employee
$918,891
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/zigman2/quotes/204008930/composite
US : U.S.: Nasdaq
$ 105.69
+4.34 +4.28%
Volume: 4.51M
Nov. 30, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$17.01 billion
Rev. per Employee
$555,091
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